Braskem sued in New York court over involvement in a graft scandal

08-Jul-15

A shareholder of Braskem SA has sued Braskem- theBrazilian petrochemical producer, accusing the company of involvement in a graft scandal that has engulfed key stakeholders Odebrecht and Petrobras and led to a selloff in Braskem's U.S.-traded stock, as per Reuters. The shares are down about a fifth so far this year. Plaintiff Douglas W. Peters is seeking class action status for the lawsuit, filed in a Manhattan federal court on behalf of individuals or institutions that purchased Braskem's American depositary receipts between June 1, 2010 and March 11, 2015, according to court documents. Braskem and four executives working for or linked with the company are accused in the suit of making "materially false and misleading statements regarding the company's business, operational, and compliance policies." Such allegations do not require proof that misstatements were made knowingly. Braskem said in a statement it had not been notified of any legal proceedings in the United States and therefore could not comment. The defendants include Braskem Chief Executive Officer Carlos Fadigas and his predecessor, Bernardo Gradin. Marcela Drehmer, the chief financial officer of Odebrecht SA, Brazil's largest engineering firm and Braskem's controlling shareholder, was also named in the lawsuit. Braskem has long-term contracts to buy naphtha from Petrobras, the state-run oil firm at the center of a sweeping corruption scandal. The other defendants could not immediately be reached for comment. Over 100 people have been indicted on charges including corruption, money laundering and racketeering in the investigation of an alleged cartel of engineering firms fixing prices on contracts with the oil company formally known as Petróleo Brasileiro SA. Odebrecht's chief executive was arrested last month and accused by prosecutors of playing a leading role in the scandal.